G.R. No.

L-10918

March 4, 1916

WILLIAM FRESSEL, ET AL., plaintiffs-appellants,

vs.
MARIANO UY CHACO SONS & COMPANY, defendant-appellee.
Rohde and Wright for appellants.
Gilbert, Haussermann, Cohn and Fisher for appellee.
TRENT, J.:
This is an appeal from a judgment sustaining the demurrer
on the ground that the complaint does not state a cause of
action, followed by an order dismissing the case after the
plaintiffs declined to amend.
The complaint, omitting the caption, etc., reads:
2. That during the latter part of the year 1913, the
defendant entered into a contract with one E. Merritt,
whereby the said Merritt undertook and agreed with the
defendant to build for the defendant a costly edifice in
the city of Manila at the corner of Calle Rosario and
Plaza del Padre Moraga. In the contract it was agreed
between the parties thereto, that the defendant at any
time, upon certain contingencies, before the completion
of said edifice could take possession of said edifice in
the course of construction and of all the materials in
and about said premises acquired by Merritt for the
construction of said edifice.
3. That during the month of August land past, the
plaintiffs delivered to Merritt at the said edifice in the
course of construction certain materials of the value of
P1,381.21, as per detailed list hereto attached and
marked Exhibit A, which price Merritt had agreed to pay
on the 1st day of September, 1914.
4. That on the 28th day of August, 1914, the defendant
under and by virtue of its contract with Merritt took

possession of the incomplete edifice in course of

construction together with all the materials on said
premises including the materials delivered by plaintiffs
and mentioned in Exhibit A aforesaid.
5. That neither Merritt nor the defendant has paid for
the materials mentioned in Exhibit A, although payment
has been demanded, and that on the 2d day of
September, 1914, the plaintiffs demanded of the
defendant the return or permission to enter upon said
premises and retake said materials at the time still
unused which was refused by defendant.
6. That in pursuance of the contract between Merritt
and the defendant, Merritt acted as the agent for
defendant in the acquisition of the materials from
plaintiffs.
The appellants insist that the above quoted allegations show
that Merritt acted as the agent of the defendant in
purchasing the materials in question and that the defendant,
by taking over and using such materials, accepted and
ratified the purchase, thereby obligating itself to pay for the
same. Or, viewed in another light, if the defendant took over
the unfinished building and all the materials on the ground
and then completed the structure according to the plans,
specifications, and building permit, it became in fact the
successor or assignee of the first builder, and as successor
or assignee, it was as much bound legally to pay for the
materials used as was the original party. The vendor can
enforce his contract against the assignee as readily as
against the assignor. While, on the other hand, the appellee
contends that Merritt, being "by the very terms of the
contract" an independent contractor, is the only person
liable for the amount claimed.
It is urged that, as the demurrer admits the truth of all the
allegations of fact set out in the complaint, the allegation in
paragraph 6 to the effect that Merritt "acted as the agent for
defendant in the acquisition of the materials from plaintiffs,"

must be, at this stage of the proceedings, considered as

true. The rule, as thus broadly stated, has many limitations
and restrictions.
A more accurate statement of the rule is that a
demurrer admits the truth of all material and relevant
facts which are well pleaded. . . . .The admission of the
truth of material and relevant facts well pleaded does
not extend to render a demurrer an admission of
inferences or conclusions drawn therefrom, even if
alleged in the pleading; nor mere inferences or
conclusions from facts not stated; nor conclusions of
law. (Alzua and Arnalot vs. Johnson, 21 Phil. Rep., 308,
350.)
Upon the question of construction of pleadings, section 106
of the Code of Civil Procedure provides that:
In the construction of a pleading, for the purpose of
determining its effects, its allegations shall be liberally
construed, with a view of substantial justice between
the parties.
This section is essentially the same as section 452 of the
California Code of Civil Procedure. "Substantial justice," as
used in the two sections, means substantial justice to be
ascertained and determined by fixed rules and positive
statutes. (Stevens vs. Ross, 1 Cal. 94, 95.) "Where the
language of a pleading is ambiguous, after giving to it a
reasonable intendment, it should be resolved against the
pleader. This is especially true on appeal from a judgment
rendered after refusal to amend; where a general and
special demurrer to a complaint has been sustained, and the
plaintiff had refused to amend, all ambiguities and
uncertainties must be construed against him." (Sutherland
on Code Pleading, vol. 1, sec. 85, and cases cited.)
The allegations in paragraphs 1 to 5, inclusive, above set
forth, do not even intimate that the relation existing
between Merritt and the defendant was that of principal and

agent, but, on the contrary, they demonstrate that Merritt

was an independent contractor and that the materials were
purchased by him as such contractor without the
intervention of the defendant. The fact that "the defendant
entered into a contract with one E. Merritt, where by the said
Merritt undertook and agreed with the defendant to build for
the defendant a costly edifice" shows that Merritt was
authorized to do the work according to his own method and
without being subject to the defendant's control, except as
to the result of the work. He could purchase his materials
and supplies from whom he pleased and at such prices as he
desired to pay. Again, the allegations that the "plaintiffs
delivered the Merritt . . . . certain materials (the materials in
question) of the value of P1,381.21, . . . . which price Merritt
agreed to pay," show that there were no contractual
relations whatever between the sellers and the defendant.
The mere fact that Merritt and the defendant had stipulated
in their building contract that the latter could, "upon certain
contingencies," take possession of the incompleted building
and all materials on the ground, did not change Merritt from
an independent contractor to an agent. Suppose that, at the
time the building was taken over Merritt had actually used in
the construction thus far P100,000 worth of materials and
supplies which he had purchased on a credit, could those
creditors maintain an action against the defendant for the
value of such supplies? Certainly not. The fact that the
P100,000 worth of supplies had been actually used in the
building would place those creditors in no worse position to
recover than that of the plaintiffs, although the materials
which the plaintiffs sold to Merritt had not actually gone into
the construction. To hold that either group of creditors can
recover would have the effect of compelling the defendants
to pay, as we have indicated, just such prices for materials
as Merritt and the sellers saw fit to fix. In the absence of a
statute creating what is known as mechanics' liens, the
owner of a building is not liable for the value of materials
purchased by an independent contractor either as such
owner or as the assignee of the contractor.

The allegation in paragraph 6 that Merritt was the agent of

the defendant contradicts all the other allegations and is a
mere conclusion drawn from them. Such conclusion is not
admitted, as we have said, by the demurrer.
The allegations in the complaint not being sufficient to
constitute a cause of action against the defendant, the
judgment appealed from is affirmed, with costs against the
appellants. So ordered.
Arellano, C.J., Torres, Johnson and Araullo, JJ., concur.
Moreland, J., concurs in the result.
Carson, J., dissents.